November 15, 2011

Oil and natural gas production on federal land is declining

November 15, 2011

Last week, the Obama administration announced their new five-year offshore drilling plan. Sadly, the plan is what we have come to expect from an administration hostile to using our domestic energy resources.

Here are a few facts everyone should know about offshore oil and gas production:

2.2 percent of offshore areas are leased for oil and natural gas production[1]

[**Update** The following bullet (and charts below) cites data from the Energy Information Administration (EIA). EIA subsequently discovered that the data they used for determining oil and natural gas production numbers on federal lands were incorrect and they are working to fix the problem. The Department of Interior, which regulates energy production on federal lands, is working with EIA to develop a system that more adequately reflects production clearly, and we will update the oil and natural gas production charts when the federal government completes its coordination and updates its information.]

Oil and natural gas production on federal lands has fallen by over 40 percent since 2000[2]

Since 2000, oil production on private and state lands has risen by 11 percent and natural gas production has riven by 40 percent[3]

When President Obama was elected, all offshore lands were available for leasing except for a small area near Florida’s coast

The Obama administration’s new five-year plan doesn’t allow oil and natural gas exploration or production on the vast majority of taxpayer-owned offshore areas

A Mere 2.2 Percent of Taxpayer-Owned Offshore Areas are Leased

Many people thought of the Bush administration as pro-oil and natural gas. But the reality is different. The amount of federal lands offered for lease for energy production actually fell during the Bush administration. In other words, the Clinton administration offered more lands for lease than the supposedly pro-oil Bush administration.

Only after oil hit $147 a barrel did the Bush administration end the moratorium on offshore drilling and produce a new drilling plant to expand leasing. Their belated attempts to allow development of taxpayer-owned resources were undermined when President Obama was inaugurated.

At the start of the Obama administration, the entire Outer Continental Shelf (OCS) was open to leasing. The administration’s new plan, however, doesn’t allow leasing on the vast majority of the OCS.

Oil and natural gas production on federal lands has declined by over 40 percent since 2000

Obama administration officials are busy trying to convince people that they are leasing enough lands. In Politico, Interior Secretary Ken Salazar recently wrote that “total U.S. crude oil production was higher in 2010 than in any year since 2003. The Obama administration continues to take meaningful steps to grow America’s domestic energy economy and secure our energy future.” Salazar describes this as being “on the right path.”

The problem is that this increase came in spite of federal policies, not because of them. Salazar conveniently omitted the fact that oil and natural gas production on federal lands has fallen off sharply since 2003. Oil production on federal lands fell by 44 percent while natural gas production on federal lands has fallen by 41 percent.[4]

The reason oil and natural gas production has increased in the U.S. is because of production on private and state lands. One example is North Dakota’s oil production. Almost all of the Bakken formation is on private lands and as a result production has dramatically increased. Over the past 10 years, North Dakota oil production has increased by nearly 250 percent, while federal oil and natural gas production has fallen over 40 percent.